This report conflicts with another Bulgarian based report that says the Euro will be in place within the next two years. I don’t know how tow stories both seemingly from professional reporters can give completely contrasting predictions. I am sure the other report form the horse’s mouth so to speak is truer. Or are they both fabricating a guessing game.
The 3% gross domestic product (GDP) fiscal deficit limit "looks like a distant prospect" for all Eastern European EU members, Pasquale Diana, Economist for the London bank appreciates in the Morgan Stanley report, quoted by Bloomberg.
The EU financial stability agreement requests from all the member states to maintain the public finance to the same level and employs sanctions against those going over the three percent limit.
The budget deficit in Romania, Poland or the Czech Republic are "heading to around 6 percent of GDP this year, maybe even wider in 2010 and are unlikely to shrink to the euro limit until 2013- 2014", the report estimates.
In order to join the euro zone, each country needs to fulfil the Maastricht treaty conditions:
· the inflation rate should not be more than 1.5% higher than the medium inflation rate of the three most prosperous EU countries;
· the budget deficit should not go over 3% of the GDP;
· and the public debt is not allowed to be more tan 60% of the GDP.
On top of these, once all the above named conditions are met, the exchange rate needs to keep a 15% stable ratio against the euro for two years, without the Central Bank's interference.
Poland could join the eurozone between 2014 and 2015, “leading the pack” of central European candidates for the common currency, Morgan Stanley said in a report quoted by Bloomberg.